NOW PLAYING

Return to Greece

Six months after leaving Athens, our correspondent returns to the country and finds that the economic situation has gone from bad to worse.

30 Jun 2011 15:33 GMT

I'm back in Athens for the first time in six months. In December, I left Greece, after living here for four happy years.

At the time, I felt sad to go, not only because this is a wonderful place to live, but also because the outlook for Greece was so bleak.

And yes, since then, many of the worst predictions have proven accurate, and things have gone from bad to worse.

The economic crisis seems to dominate all conversations. "It's not easy", says an old friend over dinner, with a weary air, "living in a society in decay".

Last year, when the government first introduced austerity measures, there was a widespread sentiment that went along the following lines "this is going to hurt, but it will be worth it, because things here need to change, and we accept the sacrifices to get Greece back on its feet".

Now, that consensus has broken.

More than a year of austerity has certainly produced plenty of pain, but there's still no sign of recovery, no light at the end of the tunnel.

Not surprisingly, a programme of drastic spending cuts in the middle of a recession has led to a further contraction of economic activity.&nbsp

Many Greeks now believe the austerity, the medicine if you like, is only hurting the patient even more.

All over Athens are the tell-tale signs of this decay the "poleitai" (for sale) and "enoikiazetai" (for rent) stickers on empty commercial properties.

When I left, these signs were already cropping up on every street, now they are the ubiquitous symbols of recession.

Syntagma Square was a battleground for two days the air thick with acrid tear-gas.

I watched hundreds of menacing hooded youths smash up shops, banks, even bus stops (I'd love to hear what their ideological objection is to public transport).

They came equipped with special hammers, and work in teams as they chisel away with industrial zeal at the square's marble masonry, so as to produce an endless supply of missiles to hurl at the police.

Most of the crowd, however, do not have sinister intentions, and it is impossible not to feel sympathy with them. The majority struggle to find space for legitimate protest, trapped as they are between the clumsy police, who fire tear-gas with careless abandon, and the thugs.

This is a pity, because the people have something very legitimate to say that more drastic cuts to the living standards of poor and middle class Greeks are unlikely to solve this country's dire economic difficulties.

Meanwhile, the occupation of Syntagma, by the "Aganaktismeni", or Indignant, shows no sign of ending.&nbsp

The Aganaktismeni are mostly young, and many of them are students. They reject all political parties, and say they are seeking a true democracy.

In places, the square looks like a refugee camp I might have seen in Africa, with clusters of little tents, and makeshift toilet and cleaning facilities.&nbsp

Except that refugee camps do not usually boast banners saying "Down with Capitalism", or "Permanent Strike Until Victory".&nbsp

And the Africans who gather on the periphery of the square seem more interested in selling counterfeit handbags and sunglasses, than in the potential downfall of capitalism.

It was not surprising that George Papandreou, the prime minister, managed to squeeze the latest austerity measures through parliament.

What will be surprising is whether his government has the authority to actually implement them.

Take the ambitious privatisation programme, for example. It includes the sale of large portions of state land, yet Greece does not have a properly functioning land registry.

And look at the latest tax rises: the government has failed badly to crack down on tax evasion, so why should it be successful in collecting more taxes?

I had coffee with a Greek man in his 50's. He said that living standards had risen throughout his lifetime, and, until very recently, he had expected this trend to continue.

"We thought we were rich", he says bitterly. Now, things feel very different. "We have less money every day" he said, "and we expect the pain to last for 10 years".

The rest of Europe looks on with fascination, but also with fear, hoping that where Greece leads, the rest of us will not follow.